Kingfisher Plc · LSE:KGF
Kingfisher — Corporate Update (June 2008)
31 slides from Kingfisher's corporate update, Jun 17, 2008
Slide 1: Castorama Russia Company presentation
Castorama Russia Company presentation June 2008
Slide 2: Content
Content 1. Russia overview: facts and figures • Macro-economic overview 2. Russian DIY market • Market size • Competitors overview • Customer behaviour 3. Castorama current performance • Format – key elements of positioning • Targeted customer types • 2004-2007 highlights • Priorities in 2008 & Beyo
Slide 3: 1. Russia overview: facts and figures
1. Russia overview : facts and figures
Slide 4: Macro-economic overview
1. Russia overview: facts and figures Macro-economic overview • One of the largest consumer markets in Europe • The fastest growing economy in Europe • Large home owning population • Fast developing home construction and • • No 5 European economy Fastest real GDP growth in Europe: for 2007 is 8,1% r
Slide 5: 2. Russian DIY market
castorama 2. Russian DIY market
Slide 6: Market size – a great opportunity
2. Russian DIY market Market size – a great opportunity DIY Market Size, Bln Euro 200 182 •Organised retail formats 180 160 DIY only Russia are developing fast , but open air markets today 140 still represent 75% of the 120 market. Their share 100 Growth rate however is rapidly 80 12% declining and
Slide 7: Types of POPs
2. Russian DIY market Types of POPs Wide range DIY hypermarkets Open markets Wholesale companies High prices Low prices Specialized stores Small stores Small range Producers 17.06.2008 7
Slide 8: Differs by region
2. Russian DIY market Differs by region Moscow St. Pet Regions • All key international players • Very competitive market, • No strong local players are already here. Still low international and local players • Big interest in DIY big box levels of penetration by large in all formats. format box reta
Slide 9: Competitor overview: Federalization of local players
2. Russian DIY market Competitor overview : “Federalization” of local players • 12 stores, 5 regions • 8 stores, 1 region • 7 stores, 3 regions + 2 new regions in 2008 • aggressive regional expansion • expansion to North-West region • aggressive regional expansion • ave store size 12 000 sq.m • ave
Slide 10: 2008 Competitive environment
2008 Competitive environment Moscow Saint Petersburg Ufa Existing: Existing: Existing: Rostov-on-Don New: New: (2) Existing: New: Volgograd Chelyabinsk New: New: Krasnodar Omsk Existing: (2) Existing: New: New: Samara Voronezh Existing: New: (2) New: 17.06.2008 10
Slide 11: St. Pet DIY market: example of the strongest competition
2. Russian DIY market St. Pet DIY market: example of the strongest competition DIY market statistic: • Number of DIY big boxes: • St. Pet: 42 • Moscow: 9 • Samara: 1 • DIY sq. m per 1000 population (big boxes only): • St. Pet: 77 sq. m. • Moscow: 19 sq. m. • Samara: 10 sq. m. St. Pet is an exception
Slide 12: Observed DIY Customer Behaviour – average Castorama customer
2. Russian DIY market Observed DIY Customer Behaviour – average Castorama customer Customer do want to shop in Share of DIYers (vs. one place DIFM) varies from 45% to 75% depending on income Customers do need wide level range, quality, low prices, brands and service, advice, Customers visit 3-5 POPs
Slide 13: Customers: regional difference
2. Russian DIY market Customers: regional difference Moscow, St. Pet Regions • Wealthiest, experienced, • Lower income, lower level sophisticated customer of living, but developing fast • Moscow/St. Pet is a magnet for • More traditional, family active, innovative people oriented, are not ready to •
Slide 14: Customer behavior: ideal POP
2. Russian DIY market Customer behavior: ideal POP Ideal POP: • convenient location • affordable prices • wide range • good service 17.06.2008 14
Slide 15: 3. Castorama Russia: overview
3. Castorama Russia: overview
Slide 16: Company overview
3. Castorama Russia: overview Company overview Hypermarket for home and renovation 2006 2007 2008 Samara St. Pet St. Pet Moscow Rostov Omsk 3 more stores in 2008 Key figures of Castorama Russia • People: 1600 • Ave store size: 11-13 000 sq. m • Range: 35 000 SKUs 17.06.2008 16
Slide 17: Format & positioning: providing the elements for completing projects
3. Castorama Russia: overview Format & positioning: providing the elements for completing projects Castorama has all the quality products at affordable prices for home, business Price and dacha (building, renovation, decoration and home improvement) and advice and services to enable you to complete
Slide 18: Format & positioning: widest range for renovation & dacha
3. Castorama Russia: overview Format & positioning: widest range for renovation & dacha • Total space is 11000–13000 sq. m. • Range is over 35 000 SKUs • The main categories are building, timber, decor, lighting, showrooms, flooring, ceramics, tools, hardware, garden • Most of the offered product ra
Slide 19: Format & positioning: lowest prices
3. Castorama Russia: overview Format & positioning: lowest prices • Our pricing strategy: Every Day Low Prices • Any time, whenever customers would like to purchase anything in Castorama they might be sure that they will always find high quality goods on the lowest prices. They shouldn’t wait for sa
Slide 20: Targeted types of customer
3. Castorama Russia: overview Targeted types of customer Trade customer Retail customer Active DIY: Active LSEDI: are currently into renovation or have are currently into renovation or have recently Small legal recently completed it. The whole scope of completed it. Some share of works were done
Slide 21: Customer communication
3. Castorama Russia: overview Customer communication For customers renovation with Castorama is simple, interesting, exciting! 17.06.2008 21
Slide 22: 3. Castorama Russia: highlights
3. Castorama Russia: highlights
Slide 23: Achievements Highlights
3. Castorama Russia: Achievements Highlights • Samara: February 2006 • St. Petersburg: July 2006, April 2007 • Moscow: June 2007 • Rostov-on-Don: December 2007 • Omsk: April 2008 Moscow Omsk St. Petersburg Rostov-on-Don Samara 17.06.2008 23
Slide 24: Brand Awareness 2007
3. Castorama Russia: Achievements Highlights Brand Awareness 2007 Castorama is #2 top of mind DIY store Castorama is an absolute leader in St. Pet in Samara after 2 years of operation St. Petersburg Samara 70 70 Only Casto has only 2 Only one Casto store stores vs. 6-7 of each 60 60 exists in Samara
Slide 25: Customer Satisfaction 2007
3. Castorama Russia: Achievements Highlights Customer Satisfaction 2007 We have carried out 21 waves of Satisfaction Study, over 30 000 interviews Over 85% Over 80% About 80% Over 85% of visitors are ready of visitors consider of visitors consider are satisfied to recommend Castorama prices Castoram
Slide 26: 3. Castorama Russia: priorities in 2008 & beyond
3. Castorama Russia: priorities in 2008 & beyond
Slide 27: Key priority – PEOPLE
3. Castorama Russia: priorities in 2008 & beyond Key priority – PEOPLE Recruitment Retention Training • Staff cost increasing - Salaries • Based on Rostov store experience the • Company bonus together with continue to boom in Moscow /Regions existing Training Store Program is retention schemes for m
Slide 28: Key priority – CUSTOMER OFFER
3. Castorama Russia: priorities in 2008 & beyond Key priority -CUSTOMER OFFER Price Service Range • Adherence to Pricing (EDLP) policy based on • Range review process • Expert Advice demonstrations the benchmark basket • Own Import increase (KAL) • Stock availability improvements • Regional pricing
Slide 29: Key priority – PROPERTY
3. Castorama Russia: priorities in 2008 & beyond Key priority - PROPERTY Leasehold Blue print Expansion • Additional focus on leasehold proposals • Add focus for the larger regional cities for • Development of design & permits process to • Additional focus and staff to follow property 2008-09 speed
Slide 30: Conclusion
Conclusion • Russia is a very attractive, large and growing home improvement market • Great opportunity for sales growth and & good returns • Castorama Russia: • developed a successful customer proposition for capturing this market • got good initial results • got a young and ambitious team of profe
Slide 31: Moscow store visit
Moscow store visit • Location: South-East of Moscow • Size: selling space 8 875 square metres • Product mix: building, timber, decor, lighting, showrooms, flooring, ceramics, tools, hardware, garden • Staff: 228 17.06.2008 31